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Toll Free: 1 800 371 6224 | US: +1 650 204 3191 | UK: +44 8082 803 175 | AU: +61 1800 247 724 | Philippine Local No: 63-2-83966000

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Home | Blog | What Makes Outsourcing to the Philippines Cheap

What Makes Outsourcing to the Philippines Cheap

By Magellan Solutions

Updated on August 7, 2023

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The Philippines is home to over 100 million people. Despite being a developing country, it has a high literacy rate, with many of the population speaking conversational English. It also has a young workforce with a median age of 23 years. All of these factors make the Philippines an attractive prospect for outsourcing clients.

However, the relatively low cost of outsourcing to the country is the most significant incentive for foreign clients. Overhead expenses, salary rates, taxes, and other business-related fees are more affordable here than in other offshore destinations in Asia.

Setting up a business in the Philippines would cost more in Thailand and almost twice as much in Indonesia.

Prime office rates in the country cost under $30 per square meter and less than $20 per square meter in new areas like Bonifacio Global City, a First World development just minutes away from the traditional business hub of Makati. The office rental rates go much lower for serviceable locations in Metro Manila. Outside Manila, Cebu City has rental spaces in modern IT-enabled buildings as low as $15 per square meter.

Moreover, you can spend modestly starting small projects before working on bigger ones. This way, you can test the waters and see if the arrangement benefits you. If the venture fails, the expenses would be minimal and easy to mitigate.

The cost-related benefits of outsourcing in the Philippines:

cost benefit of outsourcing to the Philippines

Expanded business operations – Grow your business by transferring your operations to the Philippines. Outsourcing lets you tap into a pool of skilled individuals you otherwise might not have access to. It allows you to run operations 24/7, with many Filipino workers willing to adapt to mid-day and graveyard shifts.

Increased productivity – Outsourcing to the country lets you complete more work within the same time frame. Lower salary rates and overhead costs mean you can hire more qualified professionals and lease more equipment. You can set the bar higher regarding business goals and profit margins. You’ll be able to secure more projects and transactions without falling short of human capital.

Augmentation of resources – You can pull your resources together and make the most of them. You have more purchasing power in the Philippines, where the local currency’s value remains low compared with most of its foreign counterparts. Your money will go a long way, allowing you to stretch your budget.

If you’re considering where to invest your money, outsourcing to the Philippines is a viable option. Doing so helps you expand your business, increase productivity, and maximize your resources. The country’s workforce can render services that vary in complexity and scale. Clients can outsource a wide range of processes without compromising quality and results.

Disclosure:

The Philippines is relatively open to other cultures, but cultural differences must be addressed. This cultural difference has pros and cons, and for businesses interested in local incorporation, there will be legal pitfalls, especially regarding Philippine labor laws. Ultimately, a Philippine-based partner will be responsible for that side of outsourcing.

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      What Makes Outsourcing to the Philippines Cheap

      Magellan Solutions

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